April 7th, 2005 From Consumer to Community
Over the last 4 years Tomi Ahonen and I have separately and together observed the radically changing business, media and social landscape, on an international scale. It has resulted in our book entitled Communities Dominate Brands.?
For Tomi and I, working at the epicentre of telecommunications, marketing, advertising and business/brand strategy, we have been driven to want to understand this paradigm shift because it fundamentally changes everything related to the way businesses connect and communicate with their customers. It?s about whether companies will survive or whether they will grow. This is not a UK or US phenomenon ? this is a global trend from Korea to the USA. Just read the Economist article .
Our research has demonstrated that creating, connecting and engaging communities is the way in which businesses will develop greater customer advocacy and financial success in the early 21st Century. I can hear the groans and sniggers from the sceptics ? you?re sceptical right? Well, eBay aside, as we know how important the community thing was to contributing to eBay?s success, the Boeing Corporation has 120,000 global members of its design team, and in Korea Oh My News is has 35,000 citizen reporters that write for the newspaper, obviously not all at once. Oh My News is the 3rd largest newspaper in Korea. Lonely Planet Thorn Tree anyone? Lonely Planet Thorn Tree is an online bulletin board with other 5,000 posts a day which is constantly updated fine-tuned information helping travellers across the world. Or Virtual Tourist where 400,000 members from 219 countries share insights and experiences to help each other to travel smarter. And we have not even mentioned the blogosphere yet.
Its life but not as we know it
The changes wrought by the mass unbundling of the media, the proliferation and penetration of the internet, mobile telecoms and the impact of the new digital economics, the rapid move to personalisation, the ability to avoid conventional advertising, the erosion of the mass media and the emergence of an experience based-economy. All these converging forces were described by Steve Heyer Ex-CEO of The Coca Cola Company as
“?of a magnitude and urgency of change that isn?t evolutionary ? it?s transformational”
This is where we have to start our journey
The erosion of Trust
But there is we believe another trend that is significant which underpins this paradigm shift and that is the erosion of trust in governments, the institutions of state, the commercial sector. Sadly, all have been proven to have; misled, lied, cheated and deceived. From; Enron, to Dasani in the UK, to why we went to war in Iraq, and the trustworthiness of the news and media. This is not of course a recent phenomenon, however the reach of communications is.
Either directly or indirectly, people today are far more sceptical about the precise intent of any form of communication. They look for intention, even if it doesn?t exist. They look for the motive. It has become a society whereby organisations are guilty until proven otherwise.
Glen L. Urban, Professor at the Sloan School of Management MIT has said
“Evidence is building that the paradigm of marketing is changing from the push strategies so well suited to the past 50 years of mass media to trust-based strategies that are essential in a time of information empowerment”
Information is power
In this digitally converged, always on, connected world people connect. We look to our peers and networks as voices of authority. We go online in search of the truth of unfiltered information. In the US 17% of car buyers were influenced by TV ads, 71% influenced by word of mouth Cap Gemini Ernst and Young, October 2003 research, and 26% of Americans post ratings on the internet. Doc Searls of the Cluetrain Manifesto said markets are conversations ? this today is the reality.
So information and truth become intertwined, we seek the truth in increasingly greater numbers and go online in search of it. We share that information, we discuss that information and communities can wield that information to great and devastating effect.
The blogosphere forced the resignation of Dan Rather news anchorman of 30 years at CBS due to the misreporting of Bush?s military record, and was a another nail in the coffin of big media credibility, the blogosphere has brought a class action action against Verizon and the lock maker Kryptonite was brought to its knees within weeks after a story which was initiated by the blogosphere and then picked up by the mainstream showed Kryptonite locks were not quick as reliable as they claimed. In fact these locks could be opened by a bic pen.
Some companies are enlightened, Microsoft has an army of bloggers, who have done much to soften the image of the Dark Star. Bob Lutz Vice Chairman of General Motors Blogs, Jonathan Schwartz of Sun Microsoft blogs, the Guardian in the UK has rapidly built a sophisticated online presence, including blogs.
And perhaps closer to home and on a different scale Jaime Oliver has engaged a community to wage war against companies, the education system, parents, the government and persuaded them to take seriously the food we put each day in mouths of our children. Within 6 weeks Jaime?s online petition got a staggering 271677 signatures. Blair was forced to engage and I can promise you this issue will not now go away.
Summary
Our recent times are as fundamentally important as democracy was in government 200 years ago. Think Gutenberg and moveable type and the impact that had on the future direction of society. But now these communities can rapidly form and come armed to the teeth with information, they can be forces for good, but they can and will take on those who they believe have misled, mis-sold, coerced or not delivered on their promise.
Communities can become powerful advocates and that is why unless companies serve, talk to and work with their communities ? engage ? they will not survive.
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